Q. How is Fair Market Value determined?

A. We do a very detailed analysis of fair market value properties. We start the home as close to fair market value as we can get. Remember, true Fair Market Value (FMV) is the point that a willing buyer and willing seller come together. The market will either accept or reject your price. We have to regularly drop the price every week or two until we get an offer. You have to be willing to continue to reduce the price of your home until activity is where it needs to be and we get an offer. We can't put a price on the home, and leave it there ignoring what the market is telling us. To do this would be wasting your time and ours. Remember no showings equal no contract and it only takes one!

Q. When I list my home with you, does that mean I have to stop trying to get a workout with my bank, or stop trying to refinance?

A. No. We believe that the best solution for everyone is keeping everyone who can stay in their own homes. We wish everyone who wanted to could keep their homes. We always encourage you to try to find a way to keep your home, even after we've started the short sale process. However, after we are under contract, you have a contractual obligation to sell your home if your lender approves.

Q. How do I prepare the house for sale?

A. First and foremost, put it in the best condition possible, especially if you are in a market with few buyers and lots of homes for sale. That means taking care of any major repairs that could deter a buyer (such as replacing any broken windows or replacing a leaky roof) if you can afford it. Next, work on your home's curb appeal. Make sure your landscape is pristine. Mow the grass, clean up any debris and weed the garden beds. Plant a few annual flowers near the entrance or in pots to be placed by the door. Other quick fixes that don't cost a lot of money but can help you get top dollar for your home: "Clean the windows and make sure the paint is not chipped or flaking. "Be sure that the doorbell works. "Clean and freshen up rooms, furnishings, floors, walls and ceilings. Make sure that bathrooms and kitchens are spotless. "Organize closets. "Make sure the basic appliances and fixtures work. Replace leaky faucets and frayed cords. "Eliminate the source of any bad smells, such as the kitty box. Use air freshener or bake a batch of cookies before your open house to ensure that the house smells inviting. "Invest in a couple of vases of fresh flowers to place around the house and next to any information about the house you have prepared for buyers.

Q. Can I just put a really low price on the home to get in a buyer?

A. We need to list the home for Fair Market Value. It will not do you any good to put a unrealistic price and get an offer for that price. The bank will not allow that. Remember, the bank is the one taking the hit. The bank is going to be careful about the size of the hit, and if they can get more in a foreclosure sale, they will opt for that.

Q. I'd like to do a short sale but my ex-husband/ex-wife just wants to let it foreclose. Can we still do a short sale?

A. A short sale can only be done with full cooperation of all parties. Remember, he/she will have to cooperate in providing all applicable paperwork to the bank, and they will have to sign the contract and all closing documents.

Q. How does the bank decide what the FMV is on the home?

A. It depends on the bank. Some banks do this through a BPO and some do it through an appraisal. Many times the value comes back unrealistically high and your agent has to be prepared to show the bank that the home is not worth the inflated value.

Q. How does the lender decide the maximum loan amount that can afford?

A. The lender considers your debt-to-income ratio, which is a comparison of your gross (pre-tax) income to housing and non-housing expenses. Non-housing expenses include such long-term debts as car or student loan payments, alimony, or child support. According to the FHA,monthly mortgage payments should be no more than 29% of gross income, while the mortgage payment, combined with non-housing expenses, 4 should total no more than 41% of income. The lender also considers cash available for down payment and closing costs, credit history, etc. when determining your maximum loan amount.

Q. Are there any cost or fees associated with the loan origination process?

A. Yes. When you turn in your application, you'll be required to pay a loan application fee to cover the costs of underwriting the loan. This fee pays for the home appraisal, a copy of your credit report, and any additional charges that may be necessary. The application fee is generally non-refundable.

Q. What is RESPA?

A. RESPA stands for Real Estate Settlement Procedures Act. It requires lenders to disclose information to potential customers throughout the mortgage process, By doing so, it protects borrowers from abuses by lending institutions. RESPA mandates that lenders fully inform borrowers about all closing costs, lender servicing and escrow account practices, and business relationships between closing service providers and other parties to the transaction. For more information on RESPA, or call 1-800-569-4287 for a local counseling referral.

Q. What is a good faith estimate, and how does it help me?

A. It's an estimate that lists all fees paid before closing, all closing costs, and any escrow costs you will encounter when purchasing a home. The lender must supply it within three days of your application so that you can make accurate judgments when shopping for a loan.

Q. How does purchasing a home compare with renting?

A. The two don't really compare at all. The one advantage of renting is being generally free of most maintenance responsibilities. But by renting, you lose the chance to build equity, take advantage of tax benefits, and protect yourself against rent increases. Also, you may not be free to decorate without permission and may be at the mercy of the landlord for housing. Owning a home has many benefits. When you make a mortgage payment, you are building equity. And that's an investment. Owning a home also qualifies you for tax breaks that assist you in dealing with your new financial responsibilities- like insurance, real estate taxes, and upkeep- which can be substantial. But given the freedom, stability, and security of owning your own home, they are worth it.

Q. How do I begin the process of buying a home?

A. Start by thinking about your situation. Are you ready to buy a home? How much can you afford in a monthly mortgage payment? How much space do you need? What areas of town do you like? After you answer these questions, make a "To Do" list and start doing casual research. Talk to friends and family, drive through neighborhoods, and look in the "Homes" section of the newspaper.

Q. What is the best time to buy?

A. Because many buyers prefer to move in the spring or summer, the market starts to heat up as early as February. Families with children are eager to buy so they can move during summer vacation, before the new school year begins. The market slows down in late summer before picking up again briefly in the fall. November and December have traditionlly been slow months, although some astute buyers look for bargains during this period.